Unemployment is declining, claims finance ministry

Q Block numbers stand in sharp contrast to figures presented to prime minister.

ISLAMABAD:

The finance ministry claims that unemployment has declined from 6.3% last year to 6% in fiscal 2015, a statement that stands in sharp contrast to the figures presented to Prime Minister Nawaz Sharif by the planning ministry.

The 2015 Economic Survey of Pakistan, released by Finance Minister Ishaq Dar on Thursday, claims that unemployment was 6.3% at the start of the second quarter of the fiscal year that ends June 30, meaning the government chose to use the numbers from September 2014. However, at a meeting of the National Economic Council, the planning ministry said that the unemployment rate was 8.3% in fiscal 2015 and expected to go up to 8.6% in fiscal 2016, before declining to 8.0% in fiscal 2017.

The National Economic Council is the highest economic decision making body in the country. It is chaired by the prime minister and includes the four chief ministers of the provinces.

The difference in the numbers appears to come from the Economic Survey’s estimates for the size of the labour force and the country’s total population. The survey claims that the labour force was 60.34 million in fiscal 2013 and actually declined to 60.09 million in fiscal 2014, a claim that seems dubious given Pakistan’s rapid rate of population expansion.

The unemployment rate is defined as the percentage of the labour force who are actively looking for a job but do not have one. The labour force includes all people who have a job and those who are looking for a job. It excludes students and those who choose not to work.

The Economic Survey states that the total number of unemployed people in Pakistan is 3.58 million, a decline from the 3.76 million it claims were unemployed last year.

The planning ministry, meanwhile, estimates that the total population of the country was 191.7 million in 2014, of which 64.6 million were part of the labour force and 5.3 million were unemployed. The Planning Minister estimates that the population is 195.4 million in fiscal 2015, of which 5.7 million are unemployed. The Economic Survey, meanwhile, estimates that Pakistan’s population was 188 million in 2014 and will be 191.7 million in 2015.

The massive discrepancy in the population estimates – which causes an even bigger discrepancy in the estimates for the unemployment rate – highlight the urgency of conducting a population census. The last census in Pakistan was conducted in 1998, almost 17 years ago. The next census is scheduled to be held in 2016.

During his press conference, Finance Minister Ishaq Dar admitted that the planning ministry had different projections, although he emphasised that the finance ministry’s numbers should be considered the government’s official statistics.

Planning Secretary Hassan Nawaz Tarar told reporters that the two institutions will hold a meeting over the next few days to reconcile the numbers.

Published in The Express Tribune, June 5^th, 2015.